Coalition politician reluctant about the plan to increase excise tax on fuel

Unity is sceptical about the publicly voiced plan to increase excise tax on fuel. Other members of the coalition are reluctant to comment this matter, because there is no official confirmation that this plan will be realized.

Work is currently being performed on the assessment of all possible reform-compensating mechanisms. Politicians add that calculations are necessary for the initiative to increase excise tax on fuel.

The chairman of the Union of Greens and Farmers Augusts Brigmanis said he will not comment the publicly reported information. He says there is no political confirmation that this is a real plan. Finance Ministry has not presented any plans to political parties yet. All other information reported in this context should be viewed as rumours not worth talking about, said the leader of UGF.

When asked about his opinion about the idea to increase excise tax for fuel, Brigmanis said there is a tendency in the public space to present news in a way that causes panic for society and present a situation as though ‘everything is bad’ even before decisions are announced. The politician noted that there is a specific schedule for preparing reform proposals. Brigmanis added that UGF intends to discuss the proposal before it is presented at the coalition council meeting.

Unity is sceptical about this initiative, considering its possible influence on prices of other products, said the party’s Saeima faction leader Solvita Aboltina. Fuel prices would also influence inflation. Because of that, Finance Ministry has to provide estimates, said Unity’s deputy chairman Edvards Smiltens.

Co-Chairman of the National Alliance Gaidis Berzins notes that his party is not informed about any specific figures in this matter. This is why the politician was reluctant to comment the publicly reported information about the plan to increase excise tax on fuel. He added that should such an idea be discussed, it would also be necessary to discuss its possible influence on the business environment.

Berzins said it is necessary to evaluate all possible mechanisms that would compensate the expected revenue decline after the tax reform’s realization. The politician added that even in relation to the proposal to cancel reduced VAT on medicine Prime Minister Maris Kucinskis said it would be best to search for a different solution. The term for the review of the excise tax change on fuel in the work group depends on Finance Ministry, added the co-chairman of the National Alliance.

Latvia’s stability programme for 2017-2020 states that excise tax rate for oil products used as fuel could be increased by 11.5% in 2018-2020 period. Information stated in the stability programme includes tax proposals and fiscal estimates. The discussion about the tax reform will continue until the end of April.

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